> If houses ever return to good affordability I'm screwed. Which creates a huge pool of people who are opposed to making houses more affordable.
This is the thing I never see addressed. Wouldn't fixing the housing crisis necessarily involve slashing down property values? Which are for a lot of people their only form of savings? Genuine question by the way, I would like an answer.
Yes. But that's just like any fake token being used by olds as a retirement plan.
Seeing as the olds control almost all of the wealth of industrialized nations, they should as a group be held entirely responsible for paying for entitlements and benefits for other elderly. The young should not be burdened with this. They have more burdens than they can handle already and are soon genetically extinct unless the olds take the boot from their neck.
This is the thing I never see addressed. Wouldn't fixing the housing crisis necessarily involve slashing down property values? Which are for a lot of people their only form of savings? Genuine question by the way, I would like an answer.
Yes, but that doesn't mean the people who had houses that lost value are screwed. It just means that they didn't pocket as much profit as they could have. They bought a value and a rate they could afford. They're no more or less screwed if the value of the house goes down. They're screwed if they can't pay the mortgage. Lots of people are screwed by high housing costs. The only rational conclusion is to lower housing…
> If houses ever return to good affordability I'm screwed. Which creates a huge pool of people who are opposed to making houses more affordable.
This is the thing I never see addressed. Wouldn't fixing the housing crisis necessarily involve slashing down property values? Which are for a lot of people their only form of savings? Genuine question by the way, I would like an answer.
A sharp fall in house prices might hurt some people, although the number who would be in negative equity is probably smaller than you'd think. A quick Google says only 28% of homes are owner occupied with a mortgage, and the vast majority of those will have paid off substantial capital.
I think the premise is worth questioning though:
It's true that many people have most of their wealth tied up in their house. But unless they want to substantially downsize, they can't access these savings.
In general it seems bad that it's common for people to have most of their wealth in an illiquid, undiversified investment that they also live in.
Over the last 50-70 years the UK made the choice to stop building social housing and to sell off the existing stock with aggressive government subsidies. Complaining now is a bit like complaining there's no milk after you sold the dairy farm to build a casino. I read TFA but I'm not seeing anything but useless outrage that would have been better placed 20-30 years ago I became a first time property owner at 36 and it…
I much prefer the system the US, where you know your rate for longer. Some other countries, I think the Netherlands is one, also let you fix for longer than 5 years. But why are you, and other people in your position, screwed if the prices return to affordability? High Loan-To-Value ratio so if the prices fall, the bank would force a sale?
Let's say you buy a house at 500K with a 400K mortgage. House prices fall 50%, you owe 400K on a 250K house. Banks would repossess as the loan value can't be guaranteed by the asset. Separately, you could default on the loan if laws allow it, losing much of your wealth and making it impossible for you to get a loan for the 150K to move to another house. You could keep paying the loan, spending many years of income for exactly nothing in return. People tend to buy another house immediately, so there isn't that much "freed" money. So either banks lose a huge lot of money, or people do. Either way, massive financial crisis. That's an extreme case, adjust for lower fluctuations. I can be, and probably am, completely wrong about this.
> when people feel safe, supported, and optimistic, they have kids. I actually thought that wasn't the case. Across the entire world, people in more precarious circumstances have more kids. I don't know why.
> people in more precarious circumstances have more kids. I don't know why. Did you consider that the judgement of precariousness of the people's situation is in your value system, and does not necessarily transfer to their value system? Especially this could be due to you having access to more information than them
isn’t your comment doing literally the same thing?
> If houses ever return to good affordability I'm screwed. Which creates a huge pool of people who are opposed to making houses more affordable.
This is the thing I never see addressed. Wouldn't fixing the housing crisis necessarily involve slashing down property values? Which are for a lot of people their only form of savings? Genuine question by the way, I would like an answer.
If you're not planning on selling your house it's future value is irrelevant. All I care about is the purchase price of my "forever home".
The only difference it makes it that if your lender gives more favourable interest rates when your loan to value ratio improves. So if you purchase a house and the price doubles, your LTV is already 50%. Conversely if it drops after you paid off half the mortgage, your LTV might be shit
100%, and it’s not clear there’s any solution to that, because voters will punish anyone who tries to fix it.
Well, the renters will reward any government that pushes down house prices i.e. builds more houses. And I assume there are more renters than home owners.
Renters do not want justice or fairness. They want to one day become landlords and themselves suck the blood of the young and healthy.
"A slave dreams not of freedom, but of his own slaves."
We had a chance to defuse the housing crisis with remote work and we blew it. Opportunities are concentrated and building in concentrated areas is inherently hard. We still don’t know how to scale mega cities fast while still operating them at capacity. So the problem will not go away anytime soon.
High density is supposed to be good isn't it? And density of European cities is still nowhere near what people have in East Asia
Why is it supposed to be good? Having lived in a (relatively small) city and in the countryside, I vastly prefer the countryside and actually find it more convenient in a lot of ways. An example would be the shops are a lot bigger as the land is cheap, so a 20m drive in the country gets me to a massive shop, but in the city half an hour on a bus or a 15m drive gets me to a much smaller one.
In the UK we never really got medium rise apartment blocks right. Instead we have terraces, which don't give the same housing density. The neighborhood I now live in in Portugal is mostly 7-10 storey apartment buildings, which is enough density for plenty of shops, cafes, restaurants, schools, playgrounds, public transit etc. It houses an astonishing amount of people in reasonably generous conditions (e.g. balconies are the norm), quite the modern miracle in my UK eyes.
> If houses ever return to good affordability I'm screwed. Which creates a huge pool of people who are opposed to making houses more affordable.
This is the thing I never see addressed. Wouldn't fixing the housing crisis necessarily involve slashing down property values? Which are for a lot of people their only form of savings? Genuine question by the way, I would like an answer.
The best answer I've seen is gradually increasing land value tax (yes, Georgist style). Would slowly deflate the market - but much more at the top end than the low end. Would also encourage efficient use of land. And be a new source of revenue that can replace other taxes.